Itemize, Itemize, Itemize:
Numbers can be overwhelming, especially when it comes down to the sensitiveness of tax matters. We say start small, step by step, topic by topic, department by department. Begin by separating documents and receipts according to each specific area of your business. For example, Office Supplies or Payroll. Make a folder for each, label it by name, then file by alphabetical order.
Account for All Technology + Software Purchases:
Businesses of all sizes need to be updated on their technology, it's a way to run your business smoother and service your clientele better. Under Section 179 of the tax code, equipment expenses such as computers, printers, and even company vehicles are tax-deductible, these are the ingredients that help your operation succeed. Maximize off those investments. Depending on the item, you can deduct the full cost on the year of purchase, or split it between several years.
Include Office & Staff Expenses:
Subscriptions to business-related websites and magazines are fully deductible. Combined with the conference deductions (discussed below), staying informed in your industry is essential to staying on top of the game.
Receipts Are Your Friend:
They pile up fast and they're easy to lose but their value is gold when accounting for your spending. Because their itemized, dated and stamped, their the foul-proof way to keep track of where your money is going. It's hard to keep track of these pesky little pieces of information and filing can be kind of an ancient practice, use apps like Expensify and Recieptmate are great for going digital. Also, in case of being audited, these will serve you immensely.
Team Up With An Expert:
Taxes are a complex topic because they are designed to place a carbon mark on your business and it's spending. Get someone on board like an accountant, lawyer or consultant that specializes in accounting for all your spending, getting the best bang for your buck and organizing your files efficiently.
As always with finances, especially taxes, it’s important to keep your receipts and details about the reason for purchases. While doing this for every purchase may seem over-the-top, it’s easy once you get into the habit of it. It will also save you a lot of grief if you get audited, and it will help you keep peace of mind that your finances aren’t going to get your business in trouble.
Filing for your business may be a new practice but as long as you stay organized and clear, it'll be a breeze to get through. Have any other questions? Leave us a note below.
All Images are property of Pexel.com